What is in this article?:
- When to Pull the Trigger | Do you Take a Profit or Wait for Even More?
- Don't use single strategy; capture higher prices
- Is your marketing glass half empty?
Don't use single strategy; capture higher prices
Brees doesn’t recommend a single marketing strategy, but encourages growers to have programs in place to capture higher prices. “They can consider using ‘trailing stops,’” he says. “You have downside stops to make sales if prices start down. But as the market goes higher, you raise those price levels.
“In mid-March, when the December corn futures were about $6-6.10, this plan would help them trail the market higher. For example, you have an order in to sell if the futures price drops below $5.80. If prices increase, follow the market up until it moves above $6.30 and you increase the sell order to $6. If the market moves even higher, continue to increase the sell order price until the market breaks lower and triggers a sale. Watch the market very closely.”
The same can be said for soybean sales; have a target to trigger sales as the market moves higher, says Brees, adding that the traditional scale-up plan could be a winner for growers this year.
Bunnell says having a scale-up plan in place can add to already good profits. “This type of marketing takes part of the emotion out of it,” says Bunnell, who also uses corn futures to hedge his milo production. “You’re not hedged at one single price. You can average it out.”